Accurate financial records are an essential part of every business. Companies that do not have a clear picture of their financial situation risk losing money due to inefficiency or possibly fraudulent activity. This is why it is important to create a schedule to conduct a financial statement audit that can improve the day-to-day operations at your company. If your company needs assistance performing a financial statement audit, you should consult with an experienced Roseville financial statement auditor today. At Cook CPA Group, we are devoted to providing you with the financial auditing services that your company deserves. Cook CPA Group explains when your business needs a financial statement audit.
What is a Financial Statement Audit?
A financial statement audit is an investigation of a company’s financial statements by an external auditor. The auditor is tasked with inspecting all of an entity’s financial transactions to determine whether the business is operating appropriately.
An auditor must take a multi-faceted approach when conducting a financial statement audit. One of the first tasks an auditor should perform is to gain knowledge of the business and the industry that it services. This can help the auditor look for any patterns or risk factors that the business should be aware of. The auditor should also analyze the internal controls of the company. This means that the auditor will look into the effectiveness of important processes in the business. For example, if the reporting of income is inefficient and prone to mistakes or fraud, the auditor should carefully analyze all financial records.
Other aspects of a business that the auditor should explore include:
- Assets – The property owned by the business ranging from real estate to a fleet of vehicles
- Inventory – A physical count of materials at each location of the business, linking inventory costs to a general ledger, examining supplier invoices, investigate production expenses
- Expenses – Money spent on operational expenses, debts, insurance, legal fees, and many other costs
- Revenue – Income generated by contracting to sell products or services
This is not an exhaustive list. There are other financially-related activities that an auditor will need to analyze to understand your business’ financial situation. Whether you require an audit for a small business or financial audit for a law firm, our accountants would be glad to help you. We provide auditing services for a wide range of industries.
Reasons to Conduct a Financial Statement Audit in California
There are multiple benefits to performing a financial statement audit. For example, if you do not have a strong background in managing finances for a business, hiring a California internal auditor can help you improve various aspects of your business.
One way that a financial statement audit may assist your business is by giving you an accurate picture of how you earn and spend money. New business owners sometimes underestimate the impact of a financial audit can have on their company.
A financial statement audit is also important if you need to do business with other companies. For example, if you need a loan to pursue a venture that will improve your business, a financial institution may request to analyze your financial statement. A business that does not have a solid track record of sound financial decisions may have issues obtaining a loan or even selling the business.
One of the most important scenarios that a financial statement audit can prevent is the prevalence of fraudulent activity. If you operate a business and you are not fully aware of your financial status, it is more likely for revenue to be misreported either negligently or intentionally. Frequent incidences of fraud can have devastating effects on a company over a long period of time.
Additionally, if you want to expand your business, it is important to control your financial situation. If your company is bleeding money due to poor financial decisions, this will make it difficult for your company to grow.
There are several other benefits to a financial statement audit that are not listed here. Our firm can help you evaluate your financial status and devise a strategy to keep your finances in order.
Our California Financial Auditing Services are Here for You
If you need to have a financial audit performed for your business, you should seek a well-versed California auditing service. The accountants at Cook CPA Group have a wealth of experience in handling financial audits, and we will use this experience to proudly serve your company. We understand the difficulty of running a business and keeping your financials in order, and we are prepared to work with you to alleviate the process. To schedule a free consultation to discuss your financial situation, call Cook CPA Group at (916) 724-1665, or contact us online.